What's happening
This bill allows plaintiffs to collect unsatisfied judgments from third-party defendants or co-defendants liable for contribution or indemnification.
Why it matters
Empowers plaintiffs to recover from other parties actually responsible. If the main defendant can't or won't pay a judgment, the bill lets plaintiffs collect from co-defendants or third-party defendants who are legally liable for part or all of the damages (via contribution or indemnification), increasing the likelihood that injured parties get compensated.
Closes loopholes in multi-defendant cases. Previously, plaintiffs had to rely on the main defendant to pursue contribution or indemnification claims. This bill allows plaintiffs to “step into the defendant’s shoes” to pursue or collect these claims directly, bypassing a potentially insolvent or uncooperative defendant.
Addresses bankruptcy and judgment collection obstacles. The bill specifically allows plaintiffs to pursue these collection rights even if the defendant has declared bankruptcy or had their related claims extinguished by bankruptcy, ensuring that co-defendants cannot avoid liability merely because the main defendant is insolvent.
Limits on employer liability remain. The bill does not override existing protections for employers under workers’ compensation law, meaning plaintiffs still can’t use this provision to recover from their own employer if the employer would otherwise be immune.
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Who cares
Plaintiffs with unpaid judgments
The bill would let them pursue a defendant’s contribution or indemnification claims after a judgment remains unpaid for thirty days after service, including in specified bankruptcy circumstances.
Co-defendants and third-party defendants
Those liable for contribution or indemnification could face collection or direct claims from plaintiffs seeking to recover unpaid judgments.
Employers facing workplace injury claims
The bill would preserve workers’ compensation restrictions on third-party claims and would not otherwise authorize plaintiffs to sue an employer for an incident or injury occurring during their employment.
Holders of existing unpaid judgments
The bill would apply immediately to all unexpired judgments that have not been fully satisfied when it takes effect.
Headline styles
Let Plaintiffs Sue Third Parties
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Print number 412a
- Amend and recommit to judiciary
- Referred to judiciary
- Referred to judiciary
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
412--A
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sen. DeFRANCISCO -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -- recommitted to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the civil practice law and rules, in relation to permitting a plaintiff to recover against a third party defendant in certain cases
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The civil practice law and rules is amended by adding a new section 1405 to read as follows:
§ 1405. Permitting plaintiff, as judgment creditor against defendant, to recover and collect unsatisfied judgment or portion of judgment against third-party defendant or co-defendant liable for contribution or indemnification. (a) Where a plaintiff has entered a judgment against a defendant and the judgment remains unsatisfied thirty days after it has been served on the defendant-judgment debtor, and where judgment has been entered in favor of the defendant-judgment debtor against a co-defendant or third-party defendant on a cause of action for contribution or for contractual or common law indemnification, the plaintiff-judgment creditor may collect any unsatisfied amount of the plaintiff's judgment against the defendant from the co-defendant or third-party defendant up to the amount awarded on the cause of action for contribution or indemnification.
(b) Where the plaintiff's judgment remains unsatisfied thirty days after it has been served on the defendant-judgment debtor, and where the defendant-judgment debtor has a cause of action for contribution or for contractual or common law indemnification which has not been reduced to judgment, the plaintiff-judgment creditor may attach, or take an assign-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02845-02-8
S. 412--A 2
ment from the defendant-judgment debtor of, the cause of action for contribution or indemnification, and prosecute the cause of action in the plaintiff's own name or in the name of the defendant-judgment debtor, and recover a judgment therein for the same amount of contribution or indemnification as would be awarded to the defendant-judgment debtor if the defendant-judgment debtor had satisfied plaintiff's original judgment in full. Such remedy is in addition to any other means available to the plaintiff-judgment debtor for enforcement of the judgment. This section shall not authorize direct recovery against a thirdparty defendant in those circumstances in which the third-party claim against that third-party defendant would have been barred by the provisions of section eleven of the workers' compensation law, and does not otherwise permit a plaintiff to bring a cause of action against a third party if such third party was the plaintiff's employer at the time of the incident or injury.
(c) The plaintiff-judgment creditor may enforce the rights provided in subdivisions (a) and (b) of this section notwithstanding that the plaintiff-judgment creditor's judgment against defendant-judgment debtor has been or may be discharged in bankruptcy and/or the defendant-judgment debtor's cause of action for indemnity or contribution against the third-party defendant or co-defendant has been or may be extinguished by a discharge in bankruptcy granted to the defendant-judgment debtor; provided, however, that if a plaintiff-judgment creditor is enforcing the rights provided in subdivisions (a) and (b) of this section pursuant to this subdivision, he or she does not need attachment or assignment from the defendant-judgment debtor of the cause of action for contribution or indemnification.
(d) Where the plaintiff's judgment remains unsatisfied thirty days after it has been served on the defendant-judgment debtor, and where the defendant-judgment debtor's cause of action for contribution or for contractual or common law indemnification can no longer be prosecuted or reduced to judgment, the plaintiff-judgment creditor may enforce its judgment against the defendant-judgment debtor in a direct action against the third-party defendant or co-defendant liable for contribution or indemnification, and recover a judgment therein for the same amount of contribution or indemnification as would be awarded to the defendant-judgment debtor if the defendant-judgment debtor had satisfied plaintiff's original judgment in full.
§ 2. This act shall take effect immediately, and shall apply to all unexpired judgments that have not been fully satisfied as of such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the civil practice law and rules, in relation to permitting a plaintiff to recover against a third party defendant in certain cases
Purpose
This bill would add a new Section 1405 to the Civil Practice Law and Rules (CPLR) to expressly permit a plaintiff, as judgment creditor against defendant, to recover and collect an unsatisfied judgment or portion of a judgment directly against a third-party defendant found liable for contribution or indemnification.
Summary of provisions
Section 1: Adds a new Section 1405 to the CPLR to permit a plaintiff to recover and collect an unsatisfied judgment or a portion of a judgment against a third-party defendant or co-defendant, when a plaintiff has entered judgment against a defendant which is unsatisfied thirty days after service on the defendant-judgment debtor, and where judgment has been entered in favor of the defendant-judgment debtor against a co-de- fendant or third-party defendant on a cause of action for contribution or indemnification. Under certain circumstances where the plaintiffs judgment remains unsatisfied thirty days after it has been served on the defendant-judgment debtor, and where the defendant-judgment debtor has a cause of action for contribution or indemnification which has not been reduced to judgment, then the plaintiff-judgment creditor may attach, or take an assignment from the defendant-judgment debtor of the cause of action for contribution or indemnification and prosecute the action in the plaintiffs own name or in the name of the defendant-judgment debtor. Direct recovery, however, is not authorized against a third-party defendant in those circumstances in which the third-party claim would have been barred by Section 11 of the Workers Compensation Law. Protects the ability of a plaintiff-judgment creditor to enforce their rights against a third-party pursuant to this legislation by preserving the ability for plaintiff-judgement creditor to pursue a judgment or cause of action against a third-party even if such claim or cause of action is extinguished in the bankruptcy of a defendant-judgment debtor.
Read the full memo (745 words)
Section 2: This act shall take effect immediately, and shall apply to all unexpired judgments that have not been fully satisfied as of the date of enactment.
Existing law
Section 1401 of the CPLR provides, with certain exceptions under the General Obligations Law and the Workers' Compensation Law, that two or more persons who are subject to liability for damages for the same personal injury, injury to property or wrongful death, may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the person from whom contribution is sought. Section 1403 of the CPLR provides that a cause of action for contribution may be asserted in a separate action or by cross-claim, counter-claim or third-party claim in a pending action.
Justification
A plaintiffs recovery on a judgment that ultimately comes from a third- party defendant should not depend on the fortuity of the solvency of the defendant/third party plaintiff. Accordingly, this measure would allow a plaintiff to recover on a judgment for contribution or indemnification directly against the third-party defendant, whether or not the defendant/third-party plaintiff has satisfied the underlying judgment for which contribution or indemnification is sought. Thus, in the case where a defendant/third party plaintiff is insolvent and is unable to pay the judgment to the plaintiff: the plaintiff could still seek to recover directly that portion of the judgment, as determined by the principles of contribution and indemnification, owed by the third-party defendant to the defendant/third-party plaintiff. The bill also seeks to protect the ability of an injured plaintiff to collect a judgment in the event a defendant-judgment debtor's cause of action or judgement against a 3rd party wrongdoer is extinguished in bankruptcy, leaving the plain- tiff with no remedy to collect their judgment.
This measure would not alter in any way the substantive law of Workers' Compensation. The 1996 Omnibus Worker's Compensation Reform Act already limits claims for contribution and indemnification against an employer to only those cases involving "grave injuries." In cases where there are not grave injuries the employer is not liable as a matter of substantive law, and therefore this measure would not affect such employers at all.
Legislative history
2015-2016 - S563/A.251; 2013-2014 - S.555A/A.1002A; 2011-2012 S.3761/A.630; 2009-2010 S.2392/A.2576; 2007-2008 S.2065/A.6310; 2005-2006 S.7487/A.11076; 2003-04 S.5006/A.7493;
Fiscal implications
None
Effective date
This act shall take effect immediately, and shall apply to all unexpired judgments that have not been fully satisfied as of the date of enact- ment.
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